Southeastern Mass. employers air concerns over new health law at Taunton forum

Businesses from the Taunton area and neighboring regions are concerned about how the Affordable Care Act will result in extra paperwork, the recalculation of company insurance plans to adjust to government-subsidized health care and a new system of rating factors to determine small group health insurance premiums.

Businesses from the Taunton area and neighboring regions are concerned about how the Affordable Care Act will result in extra paperwork, the recalculation of company insurance plans to adjust to government-subsidized health care and a new system of rating factors to determine small group health insurance premiums.

About 120 representatives from local businesses, human resources specialists, and insurance brokers gathered at the Holiday Inn in Taunton on Wednesday to learn about the changes going into effect next year through the federal Affordable Care Act. The event was organized by the Associated Industries of Massachusetts, the largest employer association in the state, and it featured a panel of experts from the Health Connector, the independent state agency that provides an online marketplace for health care.

“I think the biggest concern is how to find answers,” said Russ Sullivan, an AIM vice president who acted as host for the discussion. “Everyone is at a different place. Some are concerned how they will master it. Others are just concerned what the cost will be. The common denominator is uncertainty.”

Sullivan talked to the group about how the ACA will result in rating factor changes that apply to all companies with 50 employees or less, which are not mandated to provide health care to employees under the new law.

AIM initially wrote a letter to the state asking the government to support a waiver for Massachusetts, excusing it from the rating factor portion of the federal health care law. Recently, Gov. Deval Patrick wrote to the U.S. Department of Health and Human Services supporting such a waiver.

While the ACA limits the rating factors to four categories used to calculate small group health insurance premiums — including age, family size, geographic area and tobacco use — the Massachusetts health care law enacted in 2006 allows for additional consideration to the type of industry, group size and group purchasing cooperatives, along with other factors, for a total of nine factors.

AIM, which represents 5,000 Massachusetts employers, said the federal system of rating factors could increase premiums for some Massachusetts employers by more than 50 percent. A state Division of Insurance study said the increases would be roughly 60 percent of small employers (377,468) due to the rating factor changes. The report said 181,000 small scale employer members would have premium increases more than 10 percent, and more than 45,000 will have their premiums increase by 30 percent, while decreases of 10 percent will benefit 83,000 small employer plan members.

In his letter, Patrick highlighted the state’s 97 percent insurance coverage for all Massachusetts residents and said that a waiver of the new rating factor requirements “will avoid increases in health insurance premiums for a large segment of our small-employer population and their employees.”

Beyond rating factors, AIM points to a recent study commissioned by Massachusetts health insurers that predicted changes under federal health reform will raise premiums by Bay State employers by an average of 3.7 percent on top of typical base-rate increases.

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Planning for employees who opt for subsidized health care provided under the ACA was another hotly discussed topic. With a higher level of subsidies granted to employees under the law, it impacts how an employer can plan year-to-year for the health care plans that they offer to employees.

“Formerly, under the state law, if you offered your own health care you didn’t have employees able to get subsidized health care through the (Health) Connector,” said William Vernon, who was at the meeting as state director of the National Federation of Independent Business, representing 8,000 Massachusetts small businesses. “Now the employee has more choices. As a result, the employer has to make some choices as well. They’ll have to start calculating, doing more work to make up the difference in cost for the company health care plan.”

Vernon said that while there are uncertainties, “these meetings are about adapting, not complaining.”

The most important thing for small businesses to know is that there will be changes, regardless of what size the business is, Vernon said.

Among those include legally mandated notification requirements, to inform employees of federal health care changes and updates, Vernon said. That “bureaucratic paperwork” can cause more work and frustration for small companies with only a small number of workers.

“For small employers, they don’t have HR people to do this for them,” Vernon said. “For a company with five to 10, or 15 employees, they don’t have it. They might have a payroll company they may rely on. But I don’t know how much the payroll companies are aware of what’s going on here, or that they are prepared to help their clients with this.”

Vernon said that the new classification of large business as having 50 or more, compared to the state approach of 11 or more, seems like a good thing. But he said that “a lot of employers are lulled into a false sense of security” by this, despite all the new legal requirements.

In addition to many human resources and benefits workers at the meeting, there were several insurance brokers present.

John Turco, vice president of Rogers and Gray Insurance, which serves southeastern Massachusetts and the Cape, said he was trying to soak up as much information about the new law as possible.

“We’re trying to stay up,” Turco said. “It’s always changing.”

Curtis Nelson, of Nelson Insurance and Financial Services, said that the new law is a big concern among brokers who wonder if they still have a place in the market.

“The more immediate concern is how to advise our customers, the employers,” Nelson said. “You’re concerned for the small employer running a machine shop, who’s trying to survive. Then, they to deal with all these regulations. Because the law is always changing, and there are mandates coming at different dates, and sometimes they are postponed … it’s a struggle.”

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Jason Lefferts, director of communications for the Health Connector, said his agency will be providing answers to many of the questions it is getting online at www.bettermahealthconnector.org. The Healthcare Connector is participating in at least seven similar forums this month throughout the state. Lefferts said thus far his agency hasn’t received a lot of feedback in terms of cost.

“Generally we’ve seen through two meetings of these so far that the business community has a lot of questions, somewhat detailed,” Lefferts said. “More on the administrative side on how this works and what (they) need to do to be compliant. It’s been great for us so far. We’ve been able to answer a lot of questions.”